##### Table of Contents





SECURITIES AND EXCHANGE
    COMMISSION
 450 Fifth Street, N.W.
 Washington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended June
    30, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File
    No. 000-51557
  Investors Bancorp,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

22-3493930(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification Number)101 JFK Parkway, Short Hills, New Jersey

07078(Address of Principal Executive
    Offices)

Zip Code   (973) 924-5100
 (Registrants telephone
    number)
  Securities Registered Pursuant to Section 12(b) of the
    Act:
 None
  Securities Registered Pursuant to Section 12(g) of the
    Act:
 Common Stock, par value $0.01 per share
 (Title of
    Class)
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Rule 12b-2
 Large
    accelerated
    filer þ     Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




---



##### 





INVESTORS
    BANCORP, INC.
  2008
    ANNUAL REPORT ON
    FORM 10-K
  TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


2Item 1A.


Risk Factors


36Item 1B.


Unresolved Staff Comments


39Item 2.


Properties


39Item 3.


Legal Proceedings


39Item 4.


Submission of Matters to a Vote of Security
    Holders


39PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


40Item 6.


Selected Financial Data


43Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


44Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


60Item 8.


Financial Statements and Supplementary Data


60Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


61Item 9A.


Controls and Procedures


61Item 9B.


Other Information


61PART IIIItem 10.


Directors, Executive and Corporate Governance


62Item 11.


Executive Compensation


62Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


62Item 13.


Certain Relationships, Related Transactions and
    Director Independence


62Item 14.


Principal Accountant Fees and Services


62PART IVItem 15.


Exhibits and Financial Statement Schedules


62SIGNATURES


102EX-23.1: CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32: CERTIFICATION




---



##### Table of Contents



PRIVATE
    SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
  Form 10-K
    
    the timing and occurrence or non-occurrence of events may be
    subject to circumstances beyond our control;
    there may be increases in competitive pressure among financial
    institutions or from non-financial institutions;
    changes in the interest rate environment may reduce interest
    margins or affect the value of our investments;
    changes in deposit flows, loan demand or real estate values may
    adversely affect our business;
    changes in accounting principles, policies or guidelines may
    cause our financial condition to be perceived differently;
    general economic conditions, either nationally or locally in
    some or all areas in which we do business, or conditions in the
    real estate or securities markets or the banking industry may be
    less favorable than we currently anticipate;
    legislative or regulatory changes may adversely affect our
    business;
    technological changes may be more difficult or expensive than we
    anticipate;
    success or consummation of new business initiatives may be more
    difficult or expensive than we anticipate;
    litigation or other matters before regulatory agencies, whether
    currently existing or commencing in the future, may be
    determined adverse to us or may delay the occurrence or
    non-occurrence of events longer than we anticipate;
    the risks associated with continued diversification of assets
    and adverse changes to credit quality;
    difficulties associated with achieving expected future financial
    results; and
    the risk of an economic slowdown that would adversely affect
    credit quality and loan originations.    Form 10-K,
 1




---



##### Table of Contents



PART I ITEM 1.BUSINESS  Investors
    Bancorp, Inc.
            Investors
    Savings Bank
  General
  (973) 924-5100.
   2




---



##### Table of Contents



one-to
  Market
    Area
      Competition
      Lending
    Activities
   3




---



##### Table of Contents



Loan Portfolio Composition.
  At June 30,2008


2007


2006


2005


2004Amount


Percent


Amount


Percent


Amount


Percent


Amount


Percent


Amount


Percent(Dollars in thousands)Residential mortgage loans:One-to four-family

$
3,989,334



85.54
%

$
3,159,484



87.51
%

$
2,669,726



89.49
%

$
1,874,952



92.80
%

$
1,009,180



88.79
%FHA


20,229



0.43



22,624



0.63



24,928



0.84



34,008



1.68



45,680



4.02Total residential mortgage loans


4,009,563



85.97



3,182,108



88.14



2,694,654



90.33



1,908,960



94.48



1,054,860



92.81Multi-family and commercial


225,154



4.83



109,348



3.03



79,023



2.65



19,271



0.95



8,276



0.73Construction loans


260,177



5.58



153,420



4.25



66,209



2.22



7,065



0.35



845



0.07Consumer and other loans:Home equity loans


139,587



2.99



139,524



3.86



113,572



3.80



45,591



2.26



29,731



2.61Home equity credit lines


27,270



0.59



23,927



0.66



28,063



0.94



38,349



1.90



41,165



3.62Other


1,962



0.04



1,993



0.06



1,721



0.06



1,335



0.06



1,772



0.16Total consumer and other loans


168,819



3.62



165,444



4.58



143,356



4.80



85,275



4.22



72,668



6.39Total loans

$
4,663,713



100.00
%

$
3,610,320



100.00
%

$
2,983,242



100.00
%

$
2,020,571



100.00
%

$
1,136,649



100.00
%Premiums on purchased loans, net


22,622







23,587







20,327







14,113







5,274Deferred loan fees, net


(2,620
)






(1,958
)






(1,765
)






(916
)






(923
)Allowance for loan losses


(13,565
)






(6,951
)






(6,369
)






(5,723
)






(5,218
)Net loans

$
4,670,150






$
3,624,998






$
2,995,435






$
2,028,045






$
1,135,782   Loan Portfolio Maturities and
    Yields.
  At June 30, 2008Multi-Family





ConsumerResidential


and


Construction


and OtherMortgage


Commercial


Loans


Loans


Total(In thousands)Amounts Due:One year or less

$
619



296



147,076



346



148,337After one year:One to three years


504



11,214



94,600



4,037



110,355Three to five years


1,916



54,027







6,404



62,347Five to ten years


78,133



132,647



18,501



34,302



263,583Ten to twenty years


556,136



22,253







79,321



657,710Over twenty years


3,372,255



4,717







44,409



3,421,381Total due after one year


4,008,944



224,858



113,101



168,473



4,515,376Total loans

$
4,009,563



225,154



260,177



168,819



4,663,713Premiums on purchased loans


















22,622Deferred loan fees, net


















(2,620
)Allowance for loan losses


















(13,565
)Net loans

















$
4,670,150  4




---



##### Table of Contents



Due After June 30, 2009Fixed


Adjustable


Total(In thousands)Residential mortgage loans:One-to four-family

$
2,349,727



1,639,101



3,988,828FHA


20,116







20,116Total residential mortgage loans


2,369,843



1,639,101



4,008,944Multi-family and commercial


147,239



77,619



224,858Construction loans


518



112,583



113,101Consumer and other loansHome equity loans


139,385







139,385Home equity credit lines






27,151



27,151Other


1,526



411



1,937Total consumer and other loans


140,911



27,562



168,473Total loans

$
2,658,511



1,856,865



4,515,376   Residential Mortgage Loans.
       5




---



##### Table of Contents



due-on-sale
  Multi-family and Commercial Real Estate
    Loans.
      Construction Loans.
   6




---



##### Table of Contents



Commercial and Industrial Loans.
  Consumer Loans. The Wall Street
    Journal
  Loan Originations, Purchases, Sales and Servicing of
    Loans.
   7




---



##### Table of Contents



For the Years Ended June 30,2008


2007


2006(In thousands)Loan originations and purchases:Loan originations:Residential mortgage loans:One- to four-family

$
284,386


$
159,100


$
230,930FHA


483







Total residential mortgage loans


284,869



159,100



230,930Multi-family and commercial


139,995



36,862



66,786Construction loans


174,110



116,250



95,365Consumer and other loans:Home equity loans


34,039



49,214



80,870Home equity credit lines


21,759



18,442



16,396Other


2,749



2,852



1,855Total consumer and other loans


58,547



70,508



99,121Total loan originations


657,521



382,720



492,202Loan purchases:Residential mortgage loans:One- to four-family


995,753



665,166



834,815FHA


567







Total loan purchases


996,320



665,166



834,815Loan principal repayments


(599,547
)


(415,886
)


(356,976
)Other items, net(1)


(9,142
)


(2,436
)


(2,655
)Net increase in loan portfolio

$
1,045,152


$
629,564


$
967,390     (1)
    
    Other items include charge-offs, loan loss provisions, loans
    transferred to other real estate owned, and amortization and
    accretion of deferred fees and costs and discounts and premiums.    Loan Approval Procedures and
    Authority.
 8




---



##### Table of Contents



Loans to One Borrower.
  Asset
    Quality
    Collection Procedures. and/or
   9




---



##### Table of Contents



Delinquent Loans.
  Loans Delinquent For60-89 Days


90 Days and Over


TotalNumber


Amount


Number


Amount


Number


Amount(Dollars in thousands)At June 30, 2008Residential mortgage loans:One- to four-family


8


$
1,608



18


$
5,060



26


$
6,668FHA


1



66



15



1,631



16



1,697Total residential mortgage loans


9



1,674



33



6,691



42



8,365Multi-family and commercial










4



1,600



4



1,600Construction loans


1



10,960











1



10,960Consumer and other loansHome equity loans










3



88



3



88Home equity credit lines










1



30



1



30Other


2



2



2



2



4



4Total consumer and other loans


2



2



6



120



8



122Total


12


$
12,636



43


$
8,411



55


$
21,047At June 30, 2007Residential mortgage loans:One- to four-family


7


$
628



12


$
2,220



19


$
2,848FHA


2



263



14



1,300



16



1,563Total residential mortgage loans


9



891



26



3,520



35



4,411Multi-family and commercial


1



579



3



452



4



1,031Construction loans










1



1,146



1



1,146Consumer and other loansHome equity loans


1



7



1



28



2



35Home equity credit lines


3



88











3



88Other


1



1



4



3



5



4Total consumer and other loans


5



96



5



31



10



127Total


15


$
1,566



35


$
5,149



50


$
6,715At June 30, 2006Residential mortgage loans:One- to four-family


5


$
626



11


$
1,346



16


$
1,972FHA


7



682



15



1,440



22



2,122Total residential mortgage loans


12



1,308



26



2,786



38



4,094Multi-family and commercial










3



477



3



477Construction loans






















Consumer and other loansHome equity loans










1



6



1



6Home equity credit lines










1



30



1



30Other


4



51











4



51Total consumer and other loans


4



51



2



36



6



87Total


16


$
1,359



31


$
3,299



47


$
4,658  10




---



##### Table of Contents



Non-Performing Assets.
  At June 30,2008(1)


2007


2006


2005


2004(Dollars in thousands)Non-accrual loans:Residential mortgage loans:One- to four-family

$
5,060


$
2,220


$
1,346


$
3,237


$
3,021FHA


1,631



1,300



1,440



3,825



5,559Total residential mortgage loans


6,691



3,520



2,786



7,062



8,580Multi-family and commercial


1,600



452



477



608



437Construction loans


10,960



1,146











Consumer and other loans:Home equity loans


88



28



6



193



18Home equity credit lines


30







30







30Other


2



3







2



1Total consumer and other loans


120



31



36



195



49Total


19,371



5,149



3,299



7,865



9,066Total non-performing loans


19,371



5,149



3,299



7,865



9,066Real estate owned


















154Total non-performing assets

$
19,371


$
5,149


$
3,299


$
7,865


$
9,220Total non-performing loans to total loans


0.42
%


0.14
%


0.11
%


0.39
%


0.80
%Total non-performing loans to total assets


0.30
%


0.09
%


0.06
%


0.15
%


0.17
%Total non-performing assets to total assets


0.30
%


0.09
%


0.06
%


0.15
%


0.17
%     (1)
    
    An $11.0 million construction loan that is
    60-89 days
    delinquent at June 30, 2008 is classified as non-performing.    Real Estate Owned.
  Classified Assets. un-collectible
 11




---



##### Table of Contents



Impaired Loans.
    Allowance
    for Loan Losses
     12




---



##### Table of Contents



Allowance for Loan Losses.
  At or for the Years Ended June 30,2008


2007


2006


2005


2004(Dollars in thousands)Allowance balance (beginning of period)

$
6,951


$
6,369


$
5,723


$
5,218


$
4,781Provision for loan losses


6,646



729



600



604



594Charge-offs:Residential mortgage loans One- to four-family


18











3



18FHA






141



143



108



276Total residential mortgage loans


18



141



143



111



294Multi-family and commercial loans


















Construction loans


















Consumer and other loans


15



10



10



14



12Total charge-offs


33



151



153



125



306Recoveries:Residential mortgage loans One- to four-family














25



28FHA










196







Total residential mortgage loans










196



25



28Multi-family and commercial loans


















109Construction loans


















Consumer and other loans


1



4



3



1



12Total recoveries


1



4



199



26



149Net (charge-offs) recoveries


(32
)


(147
)


46



(99
)


(157
)Allowance balance (end of period)

$
13,565


$
6,951


$
6,369


$
5,723


$
5,218Total loans outstanding

$
4,663,713


$
3,610,320


$
2,983,242


$
2,020,571


$
1,136,649Average loans outstanding


4,043,398



3,305,807



2,462,270



1,533,741



926,011Allowance for loan losses as a percent of total loans outstanding


0.29
%


0.19
%


0.21
%


0.28
%


0.46
%Net loans charged off as a percent of average loans outstanding



%



%



%


(0.01
)%


(0.02
)%Allowance for loan losses to non-performing loans


70.03
%


135.00
%


193.06
%


72.77
%


57.56
%  13




---



##### Table of Contents



Allocation of Allowance for Loan
    Losses.
  At June 30,2008


2007


2006Percent of





Percent of





Percent ofLoans in





Loans in





Loans inAllowance for


Each Category


Allowance for


Each Category


Allowance for


Each CategoryLoan Losses


to Total Loans


Loan Losses


to Total Loans


Loan Losses


to Total Loans(Dollars in thousands)End of period allocated to:Residential mortgage loans:One- to four-family

$
4,377



85.54
%

$
3,316



87.51
%

$
2,770



89.49
%FHA


208



0.43



128



0.63



140



0.84Total residential mortgage loans


4,585



85.97
%


3,444



88.14
%


2,910



90.33
%Multi-family and commercial


1,677



4.83
%


956



3.03
%


1,591



2.65
%Construction loans


4,836



5.58
%


1,896



4.25
%


820



2.22
%Consumer and other loans:Home equity loans


209



2.99
%


208



3.86
%


282



3.80
%Home equity credit lines


41



0.59



36



0.66



68



0.94Other


4



0.04



3



0.06



4



0.06Total consumer and other loans


254



3.62
%


247



4.58
%


354



4.80
%Unallocated


2,213







408







694Total allowance

$
13,565



100.00
%

$
6,951



100.00
%

$
6,369



100.00
%   At June 30,2005


2004Percent of





Percent ofLoans in





Loans inAllowance for


Each Category


Allowance for


Each Category toLoan Losses


to Total Loans


Loan Losses


Total Loans(Dollars in thousands)End of period allocated to:Residential mortgage loans:One- to four-family

$
3,763



92.80
%

$
2,991



88.79
%FHA


486



1.68



429



4.02Total residential mortgage loans


4,249



94.48
%


3,420



92.81
%Multi-family and commercial


712



0.95
%


887



0.73
%Construction loans


28



0.35
%


4



0.07
%Consumer and other loans:Home equity loans


136



2.26
%


89



2.61
%Home equity credit lines


108



1.90



114



3.62Other


4



0.06



4



0.16Total consumer and other loans


248



4.22
%


207



6.39
%Unallocated


486







700Total allowance

$
5,723



100.00
%

$
5,218



100.00
%  14




---



##### Table of Contents



Security
    Investments
      asset/liability and/or
    Mortgage-Backed Securities.
   15




---



##### Table of Contents



2002-2004
  Corporate and Other Debt Securities.
         16




---



##### Table of Contents



Government Sponsored Enterprises.
  Marketable Equity Securities.
    Securities Portfolios.
  Securities
    Held-to-Maturity
  At June 30,2008


2007


2006Amortized


Estimated


Amortized


Estimated


Amortized


EstimatedCost


Fair Value


Cost


Fair Value


Cost


Fair Value(In thousands)Debt securities:Government Sponsored Enterprises

$
46,703


$
47,052


$
131,900


$
127,370


$
132,062


$
125,160Municipal bonds


10,574



10,773



14,048



14,236



14,177



14,378Corporate and other debt securities


178,669



135,527



166,074



165,897



130,111



129,739235,946



193,352



312,022



307,503



276,350



269,277Mortgage-backed securities:Federal Home Loan Mortgage Corporation


551,708



544,834



684,839



660,478



862,146



825,797Government National Mortgage Association


5,052



5,322



6,061



6,235



8,263



8,457Federal National Mortgage Association


354,493



351,003



444,689



430,723



534,679



514,513Federal housing authorities


2,849



3,077



3,027



3,251



3,189



3,442Non-agency securities


105,006



100,465



128,284



123,686



150,954



143,413Total mortgage-backed securities held-to-maturity


1,019,108



1,004,701



1,266,900



1,224,373



1,559,231



1,495,622Total securities held-to-maturity

$
1,255,054


$
1,198,053


$
1,578,922


$
1,531,876


$
1,835,581


$
1,764,899  17




---



##### Table of Contents



Securities
    Available-for-Sale
  At June 30,2008


2007


2006Amortized


Estimated


Amortized


Estimated


Amortized


EstimatedCost


Fair Value


Cost


Fair Value


Cost


Fair Value(In thousands)Equity securities

$
6,655


$
6,514


$
6,205


$
5,969


$
45,010


$
44,685Mortgage-backed securities:Federal Home Loan Mortgage Corporation


51,256



51,197



68,635



67,223



124,845



120,764Federal National Mortgage Association


49,393



49,364



70,059



68,856



208,545



201,794Non-agency securities


101,555



95,957



119,598



115,891



178,446



171,283Total mortgage-backed securities available for sale


202,204



196,518



258,292



251,970



511,836



493,841Total securities available-for-sale

$
208,859


$
203,032


$
264,497


$
257,939


$
556,846


$
538,526    18




---



##### Table of Contents






Portfolio Maturities and Yields.
  One Year or Less


More than One Year through Five Years


More than Five Years through Ten Years


More than Ten Years


Total SecuritiesWeighted





Weighted





Weighted





Weighted








WeightedAmortized


Average


Amortized


Average


Amortized


Average


Amortized


Average


Amortized





AverageCost


Yield


Cost


Yield


Cost


Yield


Cost


Yield


Cost


Fair Value


Yield(Dollars in thousands)Held to Maturity:Debt securities:Government Sponsored Enterprises

$





%

$
43,120



4.26
%

$
3,583



4.72
%

$





%

$
46,703


$
47,052



4.30
%Municipal bonds







%


2,765



6.20
%


2,679



7.68
%


5,130



9.08
%


10,574



10,773



7.97
%Corporate and other debt securities







%







%







%


178,669



4.19
%


178,669



135,527



4.19
%




%


45,885



4.38
%


6,262



5.98
%


183,799



4.33
%


235,946



193,352



4.38
%Mortgage-backed securities:Federal Home Loan Mortgage Corporation


730



4.00
%


16,693



5.82
%


268,917



2.44
%


265,368



4.57
%


551,708



544,834



3.39
%Government National Mortgage Association







%


1



12.50
%


4



10.83
%


5,047



7.19
%


5,052



5,322



7.20
%Federal National Mortgage Association







%


3,948



4.25
%


161,839



4.68
%


188,706



5.08
%


354,493



351,003



4.89
%Federal and state housing authorities







%


1,695



8.88
%


1,154



8.89
%







%


2,849



3,077



8.88
%Non-agency securities







%







%


50,394



5.04
%


54,612



4.74
%


105,006



100,465



4.88
%Total mortgage-backed securities


730



4.00
%


22,337



5.78
%


482,308



3.48
%


513,733



4.80
%


1,019,108



1,004,701



4.10
%Total securities held-to-maturity

$
730



4.00
%

$
68,222



4.84
%

$
488,570



3.51
%

$
697,532



4.68
%

$
1,255,054


$
1,198,053



4.15
%Available for Sale:Equity securities

$





%

$





%

$





%

$
6,655




%

$
6,655


$
6,514




%Mortgage-backed securities:Federal Home Loan Mortgage Corporation







%







%


7,259



4.00
%


43,997



4.68
%


51,256



51,197



4.59
%Federal National Mortgage Association







%







%


26,528



4.00
%


22,865



4.91
%


49,393



49,364



4.42
%Non-agency securities







%







%


10,872



5.00
%


90,683



4.60
%


101,555



95,957



4.64
%Total mortgage-backed securities







%







%


44,659



4.24
%


157,545



4.67
%


202,204



196,518



4.57
%Total securities available-for-sale

$





%

$





%

$
44,659



4.24
%

$
164,200



4.52
%

$
208,859


$
203,032



4.46
%


19




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##### Table of Contents



Sources
    of Funds
  General.
  Deposits.
      At June 30,2008


2007Percent of


Weighted





Percent of


WeightedTotal


Average





Total


AverageBalance


Deposits


Rate


Balance


Deposits


Rate(Dollars in thousands)Savings

$
417,196



10.51
%


1.96
%

$
358,866



9.52
%


2.13
%Checking accounts


401,100



10.10



1.28



406,231



10.78



2.30Money market deposits


229,018



5.77



2.06



182,274



4.84



2.37Total transaction accounts


1,047,314



26.38



1.72



947,371



25.14



2.25Certificates of deposit


2,922,961



73.62



3.71



2,820,817



74.86



5.03Total deposits

$
3,970,275



100.00
%


3.18
%

$
3,768,188



100.00
%


4.33
%   20




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##### Table of Contents



At June 30,2006Percent of


WeightedTotal


AverageBalance


Deposits


Rate(Dollars in thousands)Savings

$
270,924



7.92
%


0.80
%Checking


369,030



10.79



1.99Money market deposits


212,200



6.21



1.56Total transaction accounts


852,154



24.92



1.51Certificates of deposit


2,567,207



75.08



4.04Total deposits

$
3,419,361



100.00
%


3.41
%     At June 30,2008


2007


2006(Dollars in thousands)Certificates of DepositsLess than 2%

$
45,284


$
18,813


$
51,3152.01% - 3.00%


566,007



19,910



118,5383.01% - 4.00%


1,188,461



441,633



880,6614.01% - 5.00%


769,010



1,070,531



1,346,2485.01% - 6.00%


351,730



1,268,741



170,435Over 6.00%


2,469



1,189



10Total

$
2,922,961


$
2,820,817


$
2,567,207     Within


Over


Over


Over


Over


OverThree


Three to


Six Months to


One Year to


Two Years to


ThreeMonths


Six Months


One Year


Two Years


Three Years


Years


Total(Dollars in thousands)Certificates of DepositsLess than 2%

$
5,354


$
2,739


$
26,202


$
10,989


$



$



$
45,2842.01% - 3.00%


138,171



192,920



207,509



23,010



3,964



433



566,0073.01% - 4.00%


489,927



154,465



452,742



70,621



5,127



15,579



1,188,4614.01% - 5.00%


526,612



35,247



91,421



45,670



4,300



65,760



769,0105.01% - 6.00%


119,186



198,372



17,816



1,134



4,332



10,890



351,730Over 6.00%


2,469























2,469Total

$
1,281,719


$
583,743


$
795,690


$
151,424


$
17,723


$
92,662


$
2,922,961  21




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##### Table of Contents



AtJune 30, 2008(In thousands)Three months or less

$
428,309Over three months through six months


176,442Over six months through one year


216,172Over one year


56,620Total

$
877,543   Borrowings.
      At or for the Years Ended June 30,2008


2007


2006(Dollars in thousands)Balance at end of period

$
563,583


$
333,710


$
150,740Average balance during period


208,866



196,417



107,317Maximum outstanding at any month end


563,583



333,710



190,255Weighted average interest rate at end of period


3.50
%


5.42
%


5.36
%Average interest rate during period


4.41
%


5.46
%


4.30
%     At or for the Years Ended June 30,2008


2007


2006(Dollars in thousands)Balance at end of period

$
1,000,000


$
705,000


$
1,095,000Average balance during period


999,663



925,280



1,008,406Maximum outstanding at any month end


1,109,500



1,095,000



1,160,000Weighted average interest rate at end of period


4.27
%


4.78
%


4.69
%Average interest rate during period


4.58
%


4.80
%


4.03
%   Subsidiary
    Activities
    ISB Mortgage Company LLC.
 22




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##### Table of Contents



ISB Asset Corporation.
  ISB Holdings, Inc.
    Personnel
    SUPERVISION
    AND REGULATION
  General
        Form 10-K.
 23




---



##### Table of Contents



New
    Jersey Banking Regulation
  Activity Powers.
  
    real estate mortgages;
    consumer and commercial loans;
    specific types of debt securities, including certain corporate
    debt securities and obligations of federal, state and local
    governments and agencies;
    certain types of corporate equity securities; and
    certain other assets.  out-of-state
  Loans-to-One-Borrower Limitations.
  Dividends.
  Minimum Capital
    Requirements.
  Examination and Enforcement.
  Federal
    Banking Regulation
  Capital Requirements.
    
    common stockholders equity, excluding the unrealized
    appreciation or depreciation, net of tax, from available for
    sale securities; 24




---



##### Table of Contents




    non-cumulative perpetual preferred stock, including any related
    retained earnings; and
    minority interests in consolidated subsidiaries minus all
    intangible assets, other than qualifying servicing rights and
    any net unrealized loss on marketable equity securities.    
    cumulative perpetual preferred stock;
    certain perpetual preferred stock for which the dividend rate
    may be reset periodically;
    hybrid capital instruments, including mandatory convertible
    securities;
    term subordinated debt;
    intermediate term preferred stock;
    allowance for loan losses; and
    up to 45% of pretax net unrealized holding gains on available
    for sale equity securities with readily determinable fair market
    values.      case-by-case
  
    the quality of the banks interest rate risk management
    process;
    the overall financial condition of the bank; and
    the level of other risks at the bank for which capital is needed.    As of June 30, 2008PercentCapital


of Assets(1)(Dollars in thousands)Total capital

$
727,463



11.93
%Tier 1 risk-based capital

$
727,463



21.37
%Total risk-based capital

$
741,028



21.77
%     (1)
    
    For purposes of calculating Total capital, assets are based on
    adjusted total average assets. In calculating Tier 1
    risk-based capital and Total risk-based capital, assets are
    based on total risk-weighted assets. 25




---



##### Table of Contents



Activity Restrictions on State-Chartered
    Banks.
      Federal Home Loan Bank
    System.
   26




---



##### Table of Contents



Enforcement.
  Prompt Corrective Action.
    
    its ratio of total capital to risk-weighted assets is at least
    10%;
    its ratio of Tier 1 capital to risk-weighted assets is at
    least 6%; and
    its ratio of Tier 1 capital to total assets is at least 5%,
    and it is not subject to any order or directive by the FDIC to
    meet a specific capital level.    
    its ratio of total capital to risk-weighted assets is at least
    8%; or
    its ratio of Tier 1 capital to risk-weighted assets is at
    least 4%; and
    its ratio of Tier 1 capital to total assets is at least 4%
    (3% if the bank receives the highest rating under the Uniform
    Financial Institutions Rating System) and it is not a
    well-capitalized institution.    
    its total risk-based capital is less than 8%; or
    its Tier 1 risk-based-capital is less than 4%; and
    its leverage ratio is less than 4%.    
    its total risk-based capital is less than 6%;
    its Tier 1 capital is less than 3%; or
    its leverage ratio is less than 3%.      
    insolvency, or when a assets of the bank are less than its
    liabilities to depositors and others;
    substantial dissipation of assets or earnings through violations
    of law or unsafe or unsound practices;
    existence of an unsafe or unsound condition to transact business;
    likelihood that the bank will be unable to meet the demands of
    its depositors or to pay its obligations in the normal course of
    business; and 27




---



##### Table of Contents




    insufficient capital, or the incurring or likely incurring of
    losses that will deplete substantially all of the
    institutions capital with no reasonable prospect of
    replenishment of capital without federal assistance.    Deposit Insurance.
  notice-and-comment
      Transactions with Affiliates of Investors Savings
    Bank.
    
    limits the extent to which a bank or its subsidiaries may engage
    in covered transactions with any one affiliate to an
    amount equal to 10% of such banks capital stock and
    retained earnings, and limits all such transactions with all
    affiliates to an amount equal to 20% of such capital stock and
    retained earnings; and
    requires that all such transactions be on terms that are
    consistent with safe and sound banking practices.   28




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##### Table of Contents



Prohibitions Against Tying
    Arrangements.
  Privacy Standards.
      Community Reinvestment Act and Fair Lending
    Laws.
  
    a lending test, to evaluate the institutions record of
    making loans in its service areas;
    an investment test, to evaluate the institutions record of
    investing in community development projects, affordable housing,
    and programs benefiting low or moderate income individuals and
    businesses; and
    a service test, to evaluate the institutions delivery of
    services through its branches, ATMs and other offices.      Loans to
    a Banks Insiders
  Federal Regulation.
 29




---



##### Table of Contents



New Jersey Regulation.
  Federal
    Reserve System
    Interagency Guidance on Nontraditional Mortgage Product
    Risks.
   30




---



##### Table of Contents



The USA
    Patriot Act
      Sarbanes-Oxley
    Act of 2002
   31




---



##### Table of Contents



Holding
    Company Regulation
  Federal Regulation.
          
    making or servicing loans;
    performing certain data processing services;
    providing discount brokerage services; or acting as fiduciary,
    investment or financial advisor;
    leasing personal or real property;
    making investments in corporations or projects designed
    primarily to promote community welfare; and
    acquiring a savings and loan association.   32




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##### Table of Contents




    each of its depository institution subsidiaries is well
    capitalized;
    each of its depository institution subsidiaries is well
    managed;
    each of its depository institution subsidiaries has at least a
    satisfactory Community Reinvestment Act rating at
    its most recent examination; and
    the bank holding company has filed a certification with the
    Federal Reserve Board stating that it elects to become a
    financial holding company.        Conversion of Investors Bancorp, MHC to Stock
    Form.
   33




---



##### Table of Contents



New Jersey Regulation.
  Acquisition of Investors Bancorp,
    Inc.
  Federal Securities Laws.
    TAXATION
  Federal
    Taxation
  General.
  Method of Accounting.
  Bad Debt Reserves.
    Taxable Distributions and
    Recapture.
   34




---



##### Table of Contents



Alternative Minimum Tax.
  Net Operating Loss Carryforwards and Charitable
    Contribution Carryforward.
    Corporate Dividends-Received
    Deduction.
  State
    Taxation
  New Jersey State Taxation.
          Delaware State Taxation.
 35




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##### Table of Contents



ITEM 1A.
    RISK
    FACTORS  Our
    Liabilities Reprice Faster Than Our Assets and Future Increases
    in Interest Rates Will Reduce Our Profits.
    
    the interest income we earn on our interest-earning assets, such
    as loans and securities; and
    the interest expense we pay on our interest-bearing liabilities,
    such as deposits and borrowings.    and/or
      Because
    We Intend to Continue to Increase Our Commercial Originations,
    Our Lending Risk Will Increase.
   36




---



##### Table of Contents



The
    Financial Sector Is Experiencing An Economic Downturn. A
    Deterioration of Our Current
    Non-performing
    Loans or An Increase In The Number of Non-performing Loans Will
    Have An Adverse Effect On Our Operations.
    Further
    Decline In Value In Certain Investment Securities Held By The
    Company Could Require
    Write-Downs,
    Which Would Reduce Our Earnings.
    Our
    FDIC Premium Could Be Substantially Higher In The Future Which
    Would Have An Adverse Effect On Our Future
    Earnings.
    If Our
    Allowance for Loan Losses is Not Sufficient to Cover Actual Loan
    Losses, Our Earnings Could Decrease.
     37




---



##### Table of Contents



There
    Is No Assurance That Our Strategy to Change the Mix of Our
    Assets and Liabilities Will Succeed.
    Our
    Inability to Achieve Profitability on New Branches May
    Negatively Affect Our Earnings.
  de novo
  Our
    Return on Equity Has Been Low Compared to Other Financial
    Institutions. This Could Negatively Affect the Price of Our
    Common Stock.
    Strong
    Competition Within Our Market Area May Limit Our Growth and
    Profitability.
    If We
    Declare Dividends on Our Common Stock, Investors Bancorp, MHC
    Will be Prohibited From Waiving the Receipt of Dividends by
    Current Federal Reserve Board Policy, Which May Result in Lower
    Dividends for All Other Stockholders.
   38




---



##### Table of Contents



Investors
    Bancorp, MHC Exercises Voting Control Over Investors Bancorp;
    Public Stockholders Own a Minority Interest
    We
    operate in a highly regulated industry, which limits the manner
    and scope of our business activities.
    Future
    Acquisition Activity Could Dilute Book Value
  and/or
  ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   39




---



##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED
    STOCKHOLDERMATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES    Fiscal 2008


Fiscal 2007High


Low


Dividends


High


Low


DividendsFirst Quarter

$
14.60


$
11.54


$



$
15.48


$
13.16


$
Second Quarter


15.00



13.77







15.90



14.66



Third Quarter


15.59



13.17







15.81



14.24



Fourth Quarter


15.75



13.06







14.50



13.33



          40




---



##### Table of Contents



Stock
    Performance Graph
    INVESTORS
    BANCORP, INC.
  Total
    Return Performance
  
  Period EndingIndex

10/12/05

12/31/05

06/30/06

12/31/06

06/30/07

12/31/07

06/30/08Investors Bancorp, Inc.


100.00



110.08



135.23



156.99



134.03



141.12



130.34SNL Bank and Thrift Index


100.00



110.59



116.36



129.22



123.80



98.54



68.68SNL Thrift Index


100.00



112.84



121.62



131.54



120.31



78.91



62.25   *
    Source : SNL Financial LC, Charlottesville, VA 41




---



##### Table of Contents



Total Number of


Maximum NumberShares Purchased


of Shares That MayTotal Number of


Average


as Part of Publicly


Yet Be PurchasedShares


Price paid


Announced Plans


Under the Plans orPeriod

Purchased(1)(2)


Per Share


or Programs


ProgramsApril 1, 2008 through April 30, 2008


139,698


$
14.31



139,698



4,327,247May 1, 2008 through May 31, 2008


129,500



14.29



129,500



4,197,747June 1, 2008 through June 30, 2008


600,303



13.91



600,303



3,597,444Total


869,501



14.03



869,501     (1)
    
    On April 26, 2007, the Company announced its second Share
    Repurchase Program, which authorized the purchase of an
    additonal 10% of its publicly-held outstanding shares of common
    stock, or 4,785,831 shares. This stock repurchase program
    commenced upon the completion of the first program on
    May 10, 2007. This program was completed on May 7,
    2008.(2)
    
    On January 22, 2008, the Company announced its third Share
    Repurchase Program, which authorized the purchase of an
    additonal 10% of its publicly-held outstanding shares of common
    stock, or 4,307,248 shares. This stock repurchase program
    commenced upon the completion of the second program on
    May 7, 2008. This program has no expiration date and has
    3,597,444 shares yet to be purchased as of June 30,
    2008. 42




---



##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA    At June 30,2008


2007


2006


2005


2004(In thousands)Selected Financial Condition Data:Total assets

$
6,419,142


$
5,722,026


$
5,631,809


$
5,142,575


$
5,478,750Loans receivable, net


4,670,150



3,624,998



2,995,435



2,028,045



1,135,782Loans held-for-sale


9,814



3,410



974



3,412



1,428Securities held to maturity, net


1,255,054



1,578,922



1,835,581



2,128,944



2,610,374Securities available for sale, at estimated fair value


203,032



257,939



538,526



683,701



1,430,903Bank owned life insurance


96,170



92,198



82,603



79,779



75,975Deposits


3,970,275



3,768,188



3,419,361



3,373,291



3,411,267Borrowed funds


1,563,583



1,038,710



1,245,740



1,313,769



1,604,798Stockholders equity


828,538



858,859



916,291



423,704



417,041   Years Ended June 30,2008


2007(1)


2006(2)


2005(3)


2004(In thousands)Selected Operating Data:Interest and dividend income

$
312,807


$
285,223


$
252,050


$
232,594


$
215,784Interest expense


207,695



195,263



143,594



128,286



129,159Net interest income


105,112



89,960



108,456



104,308



86,625Provision for loan losses


6,646



729



600



604



593Net interest income after provision for loan losses


98,466



89,231



107,856



103,704



86,032Non-interest income (loss)


7,373



3,175



5,972



(2,080
)


4,200Non-interest expenses


80,780



77,617



90,877



107,173



58,545Income (loss) before income tax expense (benefit)


25,059



14,789



22,951



(5,549
)


31,687Income tax expense (benefit)


9,030



(7,477
)


7,610



(2,986
)


11,728Net income (loss)

$
16,029


$
22,266


$
15,341


$
(2,563
)

$
19,959Earnings per share  basic and diluted(4)

$
0.15


$
0.20


$
0.07



n/a



n/a     (1)
    
    June 30, 2007 year end results reflect a
    $9.9 million reversal of previously established valuation
    allowances for deferred tax assets.(2)
    
    June 30, 2006 year end results reflect a pre-tax
    expense of $20.7 million for the charitable contribution
    made to Investors Savings Bank Charitable Foundation as part of
    our initial public offering.(3)
    
    June 30, 2005 year end results reflect pre-tax expense
    of $54.0 million attributable to the March 2005 balance
    sheet restructuring.(4)
    
    Basic and diluted earnings per share for the year ended
    June 30, 2006 include the results of operations from
    October 11, 2005, the date the Company completed its
    initial public offering.  43




---



##### Table of Contents



At or for the Years Ended June 30,2008


2007


2006


2005


2004Selected Financial Ratios and Other Data:Performance Ratios:Return on assets (ratio of net income or loss to average total
    assets)


0.27
%


0.39
%


0.28
%


(0.05
)%


0.36
%Return on equity (ratio of net income or loss to average equity)


1.92
%


2.47
%


2.00
%


(0.62
)%


4.85
%Net interest rate spread(1)


1.28
%


1.02
%


1.65
%


1.82
%


1.45
%Net interest margin(2)


1.81
%


1.65
%


2.06
%


2.00
%


1.60
%Efficiency ratio(3)


71.81
%


83.34
%


79.42
%


104.84
%


64.46
%Non-interest expenses to average total assets


1.35
%


1.38
%


1.68
%


2.00
%


1.06
%Average interest-earning assets to average interest-bearing
    liabilities


1.15
x


1.18
x


1.15
x


1.07
x


1.07
xAsset Quality Ratios:Non-performing assets to total assets


0.30
%


0.09
%


0.06
%


0.15
%


0.17
%Non-performing loans to total loans


0.42
%


0.14
%


0.11
%


0.39
%


0.80
%Allowance for loan losses to non-performing loans


70.03
%


135.00
%


193.06
%


72.77
%


57.56
%Allowance for loan losses to total loans


0.29
%


0.19
%


0.21
%


0.28
%


0.46
%Capital Ratios:Risk-based capital (to risk-weighted assets)(4)


21.77
%


25.18
%


26.63
%


21.72
%


26.64
%Tier I risk-based capital (to risk-weighted assets)(4)


21.37
%


24.93
%


26.38
%


21.44
%


26.32
%Total capital (to average assets)(4)


11.93
%


12.52
%


12.25
%


8.35
%


7.74
%Equity to total assets


12.91
%


15.01
%


16.27
%


8.24
%


7.61
%Average equity to average assets


13.94
%


15.97
%


14.21
%


7.75
%


7.43
%Tangible capital (to tangible assets)


12.89
%


15.01
%


16.26
%


8.24
%


7.59
%Book value per common share

$
7.87


$
7.86


$
8.04



n/a



n/aOther Data:Number of full service offices


52



51



51



51



50Full time equivalent employees


537



509



510



493



486     (1)
    
    The net interest rate spread represents the difference between
    the weighted-average yield on interest-earning assets and the
    weighted- average cost of interest-bearing liabilities for the
    period.(2)
    
    The net interest margin represents net interest income as a
    percent of average interest-earning assets for the period.(3)
    
    The efficiency ratio represents non-interest expenses divided by
    the sum of net interest income and non-interest income.(4)
    
    Ratios are for Investors Savings Bank and do not include capital
    retained at the holding company level.  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS     44




---



##### Table of Contents



45




---



##### Table of Contents



Critical
    Accounting Policies
    Allowance for Loan Losses.
       46




---



##### Table of Contents



Deferred Income Taxes. Accounting for Income Taxes,
  Asset Impairment Judgments.
 47




---



##### Table of Contents



Stock-Based Compensation.
      Comparison
    of Financial Condition at June 30, 2008 and June 30,
    2007
  Total Assets.
  Net Loans.
     48




---



##### Table of Contents



and/or
  Securities.
     49




---



##### Table of Contents



2002-2004
  Stock in the Federal Home Loan Bank, Bank Owned Life
    Insurance, and Accrued Interest
    Receivable.
  Deposits.
  Borrowed Funds.
  Stockholders
    Equity.
  Analysis
    of Net Interest Income
   50




---



##### Table of Contents



Average Balances and Yields.
  For the Years Ended June 30,2008


2007


2006Average


Interest


Average


Average


Interest


Average


Average


Interest


AverageOutstanding


Earned/


Yield/


Outstanding


Earned/


Yield/


Outstanding


Earned/


Yield/Balance


Paid


Rate


Balance


Paid


Rate


Balance


Paid


Rate(Dollars in thousands)Interest-earning assets:Interest-bearing deposits

$
32,948


$
974



2.96
%

$
25,701


$
993



3.86
%

$
92,616


$
3,241



3.50
%Repurchase agreements and federal funds sold


5,798



162



2.79















16,387



613



3.74Securities available-for-sale(1)


235,385



10,826



4.60



406,274



18,006



4.43



618,970



26,233



4.24Securities held-to-maturity


1,438,804



67,977



4.72



1,689,890



80,310



4.75



2,009,729



90,378



4.50Net loans


4,043,398



229,634



5.68



3,305,807



182,996



5.54



2,462,270



128,603



5.22Stock in FHLB


44,939



3,234



7.20



40,304



2,918



7.24



55,440



2,982



5.38Total interest-earning assets


5,801,272



312,807



5.39



5,467,976



285,223



5.22



5,255,412



252,050



4.80Non-interest-earning assets


185,705











170,671











143,236Total assets

$
5,986,977










$
5,638,647










$
5,398,648Interest-bearing liabilities:Savings deposits

$
372,846



7,718



2.07


$
302,331



4,685



1.55


$
379,282



3,145



0.83Interest-bearing checking


353,564



7,329



2.07



321,155



7,473



2.33



323,873



6,088



1.88Money market accounts


204,952



5,005



2.44



185,849



3,596



1.93



255,154



3,423



1.34Certificates of deposit


2,909,550



132,693



4.56



2,719,327



124,382



4.57



2,491,183



85,720



3.44Borrowed funds


1,208,529



54,950



4.55



1,121,697



55,127



4.91



1,115,723



45,218



4.05Total interest-bearing liabilities


5,049,441



207,695



4.11



4,650,359



195,263



4.20



4,565,215



143,594



3.15Non-interest-bearing liabilities


102,828











87,946











66,433Total liabilities


5,152,269











4,738,305











4,631,648Stockholders equity


834,708











900,342











767,000Total liabilities and stockholders equity

$
5,986,977










$
5,638,647










$
5,398,648Net interest income





$
105,112










$
89,960










$
108,456Net interest rate spread(2)










1.28
%










1.02
%










1.65
%Net interest-earning assets(3)

$
751,831










$
817,617










$
690,197Net interest margin(4)










1.81
%










1.65
%










2.06
%Ratio of interest-earning assets to total interest-bearing
    liabilities


1.15
x










1.18
x










1.15
x     (1)
    
    Securities available-for-sale are stated at amortized cost,
    adjusted for unamortized purchased premiums and discounts.(2)
    
    Net interest rate spread represents the difference between the
    yield on average interest-earning assets and the cost of average
    interest-bearing liabilities.(3)
    
    Net interest-earning assets represent total interest-earning
    assets less total interest-bearing liabilities.(4)
    
    Net interest margin represents net interest income divided by
    average total interest-earning assets. 51




---



##### Table of Contents



Rate/Volume
    Analysis
    Years Ended June 30,


Years Ended June 30,2008 vs. 2007


2007 vs. 2006Increase (Decrease)


Net


Increase (Decrease)


NetDue to


Increase


Due to


IncreaseVolume


Rate


(Decrease)


Volume


Rate


(Decrease)(In thousands)Interest-earning assets:Interest-bearing deposits

$
244


$
(263
)

$
(19
)

$
(2,555
)

$
307


$
(2,248
)Repurchase agreements


162







162



(613
)






(613
)Securities available-for-sale


(7,839
)


659



(7,180
)


(9,211
)


984



(8,227
)Securities held-to-maturity


(10,946
)


(1,387
)


(12,333
)


(13,895
)


3,827



(10,068
)Net loans


43,961



2,677



46,638



48,133



6,260



54,393Stock in FHLB


334



(18
)


316



(938
)


874



(64
)Total interest-earning assets


25,916



1,668



27,584



20,921



12,252



33,173Interest-bearing liabilities:Savings deposits


1,243



1,790



3,033



(743
)


2,283



1,540Interest-bearing checking


715



(859
)


(144
)


(52
)


1,437



1,385Money market accounts


397



1,012



1,409



(1,086
)


1,259



173Certificates of deposit


8,676



(365
)


8,311



8,413



30,249



38,662Total deposits


11,031



1,578



12,609



6,532



35,228



41,760Borrowed funds


4,111



(4,288
)


(177
)


1,072



8,837



9,909Total interest-bearing liabilities


15,142



(2,710
)


12,432



7,604



44,065



51,669Increase (decrease) in net interest income

$
10,774


$
4,378


$
15,152


$
13,317


$
(31,813
)

$
(18,496
)   Comparison
    of Operating Results for the Years Ended June 30, 2008 and
    2007
  Net Income.
  Net Interest Income.
    Interest and Dividend Income.
 52




---



##### Table of Contents



Interest Expense.
      Provision for Loan Losses.
  Non-Interest Income.
  Non-Interest Expenses.
 53




---



##### Table of Contents



Income Taxes.
  Comparison
    of Operating Results for the Years Ended June 30, 2007 and
    2006
  Net Income.
  Net Interest Income.
    Interest and Dividend Income.
     54




---



##### Table of Contents



Interest Expense.
      Provision for Loan Losses.
  Non-Interest Income.
  Non-Interest Expenses.
  Income Taxes.
  Management
    of Market Risk
  Qualitative Analysis.
 55




---



##### Table of Contents



Quantitative Analysis.
  Net Interest IncomeChange in

Net Portfolio Value(2)


Estimated Net


Increase (Decrease) in Estimated Net InterestInterest Rates

Estimated


Estimated Increase (Decrease)


Interest


Income(Basis Points)(1)

NPV


Amount


Percent


Income(3)


Amount


Percent(Dollars in thousands)+ 200bp

$
437,812


$
(316,381
)


(41.9
)%

$
140,772


$
(12,285
)


(8.0
)%0bp


754,193











153,057







−100bp


860,824



106,631



14.1
%


158,295



5,238



3.4
%  56




---



##### Table of Contents



(1)
    
    Assumes an instantaneous and parallel shift in interest rates at
    all maturities.(2)
    
    NPV is the discounted present value of expected cash flows from
    assets, liabilities and off-balance sheet contracts.(3)
    
    Assumes a gradual change in interest rates over a one year
    period at all maturities.      Liquidity
    and Capital Resources
         57




---



##### Table of Contents



12-month
  Business
  Off-Balance
    Sheet Arrangements and Aggregate Contractual
    Obligations
  Off-Balance Sheet Arrangements.
  Contractual Obligations.
 58




---



##### Table of Contents



Payments Due by PeriodLess than


One to


Three to


More thanContractual Obligations

One Year


Three Years


Five Years


Five Years


Total(In thousands)Other borrowed funds

$
138,000


$
115,000


$
260,583


$
50,000


$
563,583Repurchase agreements


195,000



610,000



195,000







1,000,000Operating leases


3,957



8,165



7,880



17,187



37,189Total

$
336,957


$
733,165


$
463,463


$
67,187


$
1,600,772   Recent
    Accounting Pronouncements
      157-1, (FSP 157-1) FSP 157-2, (FSP 157-2). FSP 157-1 FSP 157-2
     59




---



##### Table of Contents



EITF 06-11 EITF 06-11 EITF 06-11
  EITF 03-6-1 EITF 03-6-1
  Impact of
    Inflation and Changing Prices
    ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK  Item 7-
  ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Form 10-K.
 60




---



##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES    Rule 13a-15(e) 15d-15(e)
              Internal Control-Integrated
    Framework
    Form 10-K.
  ITEM 9B.
    OTHER
    INFORMATION   61




---



##### Table of Contents



PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    ITEM 11.
    EXECUTIVE
    COMPENSATION  Directors-Director
  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Financial Statements
 62




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
            Internal
    Control  Integrated Framework
  KPMG
    LLP
    63




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
      Internal
    Control  Integrated Framework
        Internal Control 
    Integrated Framework
    KPMG
    LLP
     64




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Consolidated
    Balance Sheets
 June 30,
    2008 and 2007
  2008


2007(In thousands)ASSETSCash and cash equivalents

$
22,823



35,582Securities
    available-for-sale,
    at estimated fair value (notes 5 and 11)


203,032



257,939Securities
    held-to-maturity,
    net (estimated fair value of $1,198,053 and $1,531,876 at
    June 30, 2008 and June 30, 2007, respectively)
    (notes 4 and 11)


1,255,054



1,578,922Loans receivable, net (note 6)


4,670,150



3,624,998Loans
    held-for-sale


9,814



3,410Stock in the Federal Home Loan Bank


60,935



34,069Accrued interest receivable (note 7)


27,716



24,818Office properties and equipment, net (note 9)


29,710



28,652Net deferred tax asset (note 12)


40,702



40,144Bank owned life insurance (note 1)


96,170



92,198Other assets


3,036



1,294$
6,419,142



5,722,026LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits (note 10)

$
3,970,275



3,768,188Borrowed funds (note 11)


1,563,583



1,038,710Advance payments by borrowers for taxes and insurance


21,829



18,062Other liabilities


34,917



38,207Total liabilities


5,590,604



4,863,167Stockholders equity (notes 3 and 16):Preferred stock, $0.01 par value, 50,000,000 authorized
    shares; none issued






Common stock, $0.01 par value, 200,000,000 shares
    authorized; 118,020,280 issued; 109,010,756 and 113,213,544
    outstanding at June 30, 2008 and June 30, 2007,
    respectively


532



532Additional paid-in capital


514,613



506,026Retained earnings


486,244



470,205Treasury stock, at cost; 9,009,524 and 4,806,736 shares at
    June 30, 2008 and June 30, 2007, respectively


(128,977
)


(70,973
)Unallocated common stock held by the employee stock ownership
    plan


(37,578
)


(38,996
)Accumulated other comprehensive loss


(6,296
)


(7,935
)Total stockholders equity


828,538



858,859Commitments and contingencies (notes 8 and 14)Total liabilities and stockholders equity

$
6,419,142



5,722,026    65




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Consolidated
    Statements of Income
 Years
    ended June 30, 2008, 2007 and 2006
  2008


2007


2006(In thousands, except per share data)Interest and dividend income:Loans receivable and loans
    held-for-sale

$
229,634



182,996



128,603Securities:Government-sponsored enterprise obligations


4,662



5,851



7,366Mortgage-backed securities


62,919



80,712



100,210Equity securities
    available-for-sale


287



1,786



2,230Municipal bonds and other debt


10,935



9,967



6,805Interest-bearing deposits


974



993



3,241Repurchase agreements


162







613Federal Home Loan Bank stock


3,234



2,918



2,982Total interest and dividend income


312,807



285,223



252,050Interest expense:Deposits (note 10)


152,745



140,136



98,376Secured borrowings


54,950



55,127



45,218Total interest expense


207,695



195,263



143,594Net interest income


105,112



89,960



108,456Provision for loan losses (note 6)


6,646



729



600Net interest income after provision for loan losses


98,466



89,231



107,856Non-interest income:Fees and service charges


3,022



2,762



2,659Income on bank owned life insurance (note 1)


3,972



3,749



2,824Gain on sales of mortgage loans, net


605



244



289(Loss) gain on securities, net (notes 4 and 5)


(682
)


(3,790
)


5Other income


456



210



195Total non-interest income


7,373



3,175



5,972Non-interest expenses:Compensation and benefits (note 13)


53,886



51,221



44,570Advertising and promotional expense


2,736



3,310



2,567Office occupancy and equipment expense (notes 9 and 14)


10,888



10,470



10,794Federal deposit insurance premiums


445



451



487Stationery, printing, supplies and telephone


1,869



1,688



1,875Professional fees


2,008



2,094



1,896Data processing service fees


4,730



4,315



4,013Contribution to charitable foundation (note 3)










20,651Other operating expenses


4,218



4,068



4,024Total non-interest expenses


80,780



77,617



90,877Income before income tax expense (benefit)


25,059



14,789



22,951Income tax expense (benefit) (note 12)


9,030



(7,477
)


7,610Net income

$
16,029



22,266



15,341Earnings per share  basic and diluted (fiscal 2008
    and 2007 represent a full year, fiscal 2006 represents the
    period from October 11, 2005 to June 30, 2006)
    (note 19)

$
0.15



0.20



0.07Weighted average shares outstandingBasic


105,447,910



111,730,234



113,885,545Diluted


105,601,764



112,012,064



113,885,545    66




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Consolidated
    Statements of Stockholders Equity
    Years ended June 30, 2008, 2007 and 2006
  UnallocatedCommon


AccumulatedAdditional








Stock


Other


TotalCommon


Paid-in


Retained


Treasury


Held by


Comprehensive


StockholdersStock


Capital


Earnings


Stock


ESOP


Loss


Equity(In thousands)Balance at June 30, 2005

$




35



427,346











(3,677
)


423,704Comprehensive income:Net income










15,341















15,341Change in minimum pension liability, net of tax expense of $490






















733



733Unrealized loss on securities
    available-for-sale,
    net of tax benefit of $5,802






















(8,542
)


(8,542
)Total comprehensive income


























7,532Sale of 53,175,907 shares of common stock in the initial
    public offering and issuance of 64,844,373 shares to mutual
    holding company


532



524,642



















525,174Purchase of common stock by the ESOP


















(42,541
)






(42,541
)ESOP shares allocated or committed to be released






295











2,127







2,422Balance at June 30, 2006

$
532



524,972



442,687







(40,414
)


(11,486
)


916,291Comprehensive income:Net income










22,266















22,266Change in minimum pension liability, net of tax expense of $245






















368



368Unrealized gain on securities
    available-for-sale,
    net of tax expense of $3,273






















5,068



5,068Reclassification adjustment for losses included in net income,
    net of tax benefit of $1,347






















2,075



2,075Total comprehensive income


























29,777Cummulative effect of change in accounting for bank owned life
    insurance










5,564















5,564Purchase of treasury stock (6,473,695 shares)














(96,706
)










(96,706
)Treasury stock allocated to restricted stock plan






(25,421
)


(312
)


25,733











Funded status of postretirement plans upon adoption of
    SFAS No. 158, net of tax benefit of $2,638






















(3,960
)


(3,960
)Compensation cost for stock options and restricted stock






5,821



















5,821ESOP shares allocated or committed to be released






654











1,418







2,072Balance at June 30, 2007

$
532



506,026



470,205



(70,973
)


(38,996
)


(7,935
)


858,859Comprehensive income:Net income










16,029















16,029Change in funded status of postretirement plan due to plan
    curtailment and settlement, net of tax expense of $891






















1,337



1,337Change in funded status of retirement obligations, net of tax
    benefit of $107






















(169
)


(169
)Unrealized loss on securities
    available-for-sale,
    net of tax expense of $260






















(208
)


(208
)Reclassification adjustment for losses included in net income






















679



679Total comprehensive income


























17,668Cummulative effect adjustment upon adoption of FIN 48










300















300Purchase of treasury stock (4,339,530 shares)














(60,124
)










(60,124
)Treasury stock allocated to restricted stock plan






(1,830
)


(290
)


2,120











Compensation cost for stock options and restricted stock






9,814



















9,814ESOP shares allocated or committed to be released






603











1,418







2,021Balance at June 30, 2008

$
532



514,613



486,244



(128,977
)


(37,578
)


(6,296
)


828,538    67




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Consolidated
    Statements of Cash Flows
    Years ended June 30, 2008, 2007 and 2006
   2008


2007


2006(In thousands)Cash flows from operating activities:Net income

$
16,029



22,266



15,341Adjustments to reconcile net income to net cash provided by
    operating activities:Contribution of stock to charitable foundation










15,488ESOP and stock-based compensation expense


11,835



7,893



2,422Amortization of premiums and accretion of discounts on
    securities, net


993



1,552



1,441Amortization of premiums and accretion of fees and costs on
    loans, net


2,389



1,881



2,076Provision for loan losses


6,646



729



600Depreciation and amortization of office properties and equipment


2,760



2,937



3,041Loss (gain) on securities, net


682



3,790



(5
)Mortgage loans originated for sale


(139,487
)


(41,887
)


(28,355
)Proceeds from mortgage loan sales


133,688



39,934



31,082Gain on sales of mortgage loans, net


(605
)


(244
)


(289
)Income on bank owned life insurance


(3,972
)


(3,749
)


(2,824
)Increase in accrued interest receivable


(2,898
)


(3,247
)


(2,790
)Deferred tax benefit


(1,602
)


(14,016
)


(9,798
)(Increase) decrease in other assets


(1,742
)


(236
)


706(Decrease) increase in other liabilities


(1,038
)


(1,580
)


14,241Total adjustments


7,649



(6,243
)


27,036Net cash provided by operating activities


23,678



16,023



42,377Cash flows from investing activities:Purchases of loans receivable


(996,320
)


(665,166
)


(834,815
)Net (originations) repayments of loans receivable


(58,005
)


32,788



(135,184
)Net proceeds from sale of foreclosed real estate


138







Purchases of mortgage-backed securities
    held-to-maturity






(22,696
)


(64,356
)Purchases of debt securities
    held-to-maturity


(23,118
)


(46,362
)


(346,005
)Purchases of other investments
    available-for-sale


(1,400
)






Proceeds from paydowns/maturities on mortgage-backed securities
    held-to-maturity


247,018



290,649



472,797Proceeds from calls/maturities on debt securities
    held-to-maturity


98,876



10,137



229,495Proceeds from paydowns/maturities on mortgage-backed securities
    available-for-sale


56,205



89,170



130,760Proceeds from sales of mortgage-backed securities
    held-to-maturity






22,942



Proceeds from sales of mortgage-backed securities
    available-for-sale






161,112



Proceeds from sales of equity securities
    available-for-sale


250



3,681



Proceeds from call of equity securities
    available-for-sale






35,000



Proceeds from redemptions of Federal Home Loan Bank stock


35,208



48,908



88,673Purchases of Federal Home Loan Bank stock


(62,074
)


(36,651
)


(73,185
)Purchases of office properties and equipment


(3,818
)


(2,098
)


(1,322
)Purchase of bank owned life insurance






(282
)


Net cash used in investing activities


(707,040
)


(78,868
)


(533,142
)Cash flows from financing activities:Net increase in deposits


202,087



348,827



46,075Net proceeds from sale of common stock










509,686Loan to ESOP for purchase of common stock










(42,541
)Net (decrease) increase in funds borrowed under short-term
    repurchase agreements


(135,000
)


(165,000
)


325,000Proceeds from funds borrowed under other repurchase agreements


640,000



360,000



475,000Repayments of funds borrowed under other repurchase agreements


(210,000
)


(585,000
)


(930,000
)Net increase in other borrowings


229,873



182,970



61,971Net increase in advance payments by borrowers for taxes and
    insurance


3,767



2,354



4,506Purchase of treasury stock


(60,124
)


(96,706
)


Net cash provided by financing activities


670,603



47,445



449,697Net decrease in cash and cash equivalents


(12,759
)


(15,400
)


(41,068
)Cash and cash equivalents at beginning of year


35,582



50,982



92,050Cash and cash equivalents at end of year

$
22,823



35,582



50,982Supplemental cash flow information:Noncash investing activities:Real estate acquired through foreclosure

$
138







Cash paid during the year for:Interest


205,660



196,170



144,296Income taxes


9,217



9,662



9,404    68




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial Statements
 Years Ended June 30, 2008, 2007 and 2006
  (1)
    Summary
    of Significant Accounting Policies    (a)
    Basis
    of Presentation          Business
      (b)
    Cash
    Equivalents    (c)
    Securities  held-to-maturity available-for-sale.
  held-to-maturity available-for-sale
 69




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
  Available-for-sale
  available-for-sale held-to-maturity other-than-temporary other-than-temporary,
    (d)
    Loans
    Receivable, Net  held-for-sale, held-for-sale
       70




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
    (e)
    Office
    Properties and Equipment, Net    (f)
    Real
    Estate Owned    (g)
    Bank
    Owned Life Insurance  06-05, Bulletin No. 85-4. Bulletin No. 85-4, No. 06-05,
    (h)
    Mortgage
    Servicing Rights   71




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
  (i)
    Federal
    Home Loan Bank Stock    (j)
    Borrowed
    Funds      (k)
    Income
    Taxes      (l)
    Employee
    Benefits    and/or
 72




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
        No. 93-6,
    (m)
    Earnings
    Per Share     73




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
  (n)
    Reclassifications    (2)
    Merger  pooling-of-interests
    (3)
    Stock
    Transactions  Stock
    Offering
    Stock
    Repurchase Programs
   74




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
  (4)
    Securities
    Held-to-Maturity    June 30, 2008Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Debt securities:Government-sponsored enterprises

$
46,703



443



94



47,052Municipal bonds


10,574



212



13



10,773Corporate and other debt securities


178,669







43,142



135,527235,946



655



43,249



193,352Mortgage-backed securities:Federal Home Loan Mortgage Corporation


551,708



1,307



8,181



544,834Federal National Mortgage Association


354,493



1,139



4,629



351,003Government National Mortgage Association


5,052



270







5,322Federal housing authorities


2,849



228







3,077Non-agency securities


105,006







4,541



100,4651,019,108



2,944



17,351



1,004,701Total securities held-to-maturity

$
1,255,054



3,599



60,600



1,198,053   June 30, 2007Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Debt securities:Government-sponsored enterprises

$
131,900



8



4,538



127,370Municipal bonds


14,048



207



19



14,236Corporate and other debt securities


166,074



592



769



165,897312,022



807



5,326



307,503Mortgage-backed securities:Federal Home Loan Mortgage Corporation


684,839



529



24,890



660,478Federal National Mortgage Association


444,689



778



14,744



430,723Government National Mortgage Association


6,061



175



1



6,235Federal housing authorities


3,027



224







3,251Non-agency securities


128,284



39



4,637



123,6861,266,900



1,745



44,272



1,224,373Total securities held-to-maturity

$
1,578,922



2,552



49,598



1,531,876    75




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
      June 30, 2008Amortized


EstimatedCost


Fair Value(In thousands)Due in one year or less

$




Due after one year through five years


45,885



46,305Due after five years through ten years


6,262



6,287Due after ten years


183,799



140,760Total

$
235,946



193,352       June 30, 2008Less than 12 Months


12 Months or More


TotalEstimated


Unrealized


Estimated


Unrealized


Estimated


UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


Losses(In thousands)Debt securities:Government-sponsored enterprises

$
14,906



94











14,906



94Municipal bonds


1,341



13











1,341



13Corporate and other debt securities


105,855



32,316



29,672



10,826



135,527



43,142122,102



32,423



29,672



10,826



151,774



43,249Mortgage-backed securities:Federal Home Loan Mortgage Corporation


228,833



3,428



157,496



4,753



386,329



8,181Federal National Mortgage Association


180,992



1,978



94,077



2,651



275,069



4,629Non-agency securities


51,314



1,778



49,151



2,763



100,465



4,541461,139



7,184



300,724



10,167



761,863



17,351Total

$
583,241



39,607



330,396



20,993



913,637



60,600  76




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
  June 30, 2007Less than 12 Months


12 Months or More


TotalEstimated


Unrealized


Estimated


Unrealized


Estimated


UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


Losses(In thousands)Debt securities:Government-sponsored enterprises

$








126,582



4,538



126,582



4,538Municipal bonds










1,474



19



1,474



19Corporate and other debt securities


44,160



528



9,891



241



54,051



76944,160



528



137,947



4,798



182,107



5,326Mortgage-backed securities:Federal Home Loan Mortgage Corporation


31,288



419



581,942



24,471



613,230



24,890Federal National Mortgage Association


54,970



1,012



339,181



13,732



394,151



14,744Government National Mortgage Association


581



1











581



1Non-agency securities










115,141



4,637



115,141



4,63786,839



1,432



1,036,264



42,840



1,123,103



44,272Total

$
130,999



1,960



1,174,211



47,638



1,305,210



49,598       2002-2004
 77




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
    (5)
    Securities
    Available-for-Sale    June 30, 2008Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Equity securities

$
6,655







141



6,514Mortgage-backed securities:Federal Home Loan Mortgage Corporation

$
51,256



182



241



51,197Federal National Mortgage Association


49,393



174



203



49,364Non-agency securities


101,555



6



5,604



95,957Total securities available-for-sale

$
208,859



362



6,189



203,032   June 30, 2007Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Equity securities

$
6,205







236



5,969Mortgage-backed securities:Federal Home Loan Mortgage Corporation

$
68,635



15



1,427



67,223Federal National Mortgage Association


70,059



162



1,365



68,856Non-agency securities


119,598







3,707



115,891Total securities available-for-sale

$
264,497



177



6,735



257,939     ninety-day
     78




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
    June 30, 2008Less than 12 Months


12 Months or More


TotalEstimated


Unrealized


Estimated


Unrealized


Estimated


UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


Losses(In thousands)Equity securities

$
1,238



141











1,238



141Mortgage-backed securities:Federal Home Loan Mortgage Corporation


24,517



241











24,517



241Federal National Mortgage Association


25,622



203











25,622



203Non-agency securities


63,155



3,946



30,428



1,658



93,583



5,604Total

$
114,532



4,531



30,428



1,658



144,960



6,189   June 30, 2007Less than 12 Months


12 Months or More


TotalEstimated


Unrealized


Estimated


Unrealized


Estimated


UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


Losses(In thousands)Equity securities

$








5,969



236



5,969



236Mortgage-backed securities:Federal Home Loan Mortgage Corporation










50,031



1,427



50,031



1,427Federal National Mortgage Association










49,858



1,365



49,858



1,365Non-agency securities










115,891



3,707



115,891



3,707Total

$








221,749



6,735



221,749



6,735   2002-2004
 79




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
  (6)
    Loans
    Receivable, Net    June 30,2008


2007(In thousands)Residential mortgage loans:One-to four-family

$
3,989,334



3,159,484FHA


20,229



22,624Multi-family and commercial


225,154



109,348Construction loans


260,177



153,420Consumer and other loans


168,819



165,444Total loans


4,663,713



3,610,320Premiums on purchased loans, net


22,622



23,587Deferred loan fees, net


(2,620
)


(1,958
)Allowance for loan losses


(13,565
)


(6,951
)$
4,670,150



3,624,998       Year Ended June 30,2008


2007


2006(In thousands)Balance at beginning of year

$
6,951



6,369



5,723Loans charged off


(33
)


(151
)


(153
)Recoveries


1



4



199Net charge-offs


(32
)


(147
)


46Provision for loan losses


6,646



729



600Balance at end of year

$
13,565



6,951



6,369      80




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
    (7)
    Accrued
    Interest Receivable    June 30,2008


2007(In thousands)Securities

$
6,041



8,840Loans receivable


21,675



15,978$
27,716



24,818   (8)
    Financial
    Transactions with Off-Balance-Sheet Risk and Concentrations of
    Credit Risk      case-by-case
  and/or
   81




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
      (9)
    Office
    Properties and Equipment, Net    June 30,2008


2007(In thousands)Land

$
5,702



5,702Office buildings


14,108



14,212Leasehold improvements


14,638



13,854Furniture, fixtures and equipment


18,265



17,738Construction in process


1,661



1,00754,374



52,513Less accumulated depreciation and amortization


24,664



23,861$
29,710



28,652     (10)
    Deposits    June 30,2008


2007Weighted





%


Weighted





%Average





of


Average





ofRate


Amount


Total


Rate


Amount


Total(Dollars in thousands)Savings


1.96
%

$
417,196



10.51
%


2.13
%

$
358,866



9.52
%Checking accounts


1.28



401,100



10.10



2.30



406,231



10.78Money market deposits


2.06



229,018



5.77



2.37



182,274



4.84Total transaction accounts


1.72



1,047,314



26.38



2.25



947,371



25.14Certificates of deposit


3.71



2,922,961



73.62



5.03



2,820,817



74.863.18
%

$
3,970,275



100.00
%


4.33
%

$
3,768,188



100.00
%  82




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
    June 30, 2008(In thousands)Within one year

$
2,661,152One to two years


151,424Two to three years


17,723Three to four years


64,739After four years


27,923$
2,922,961       Year Ended June 30,2008


2007


2006(In thousands)Savings

$
7,718



4,685



3,145Checking accounts


7,329



7,473



6,088Money market deposits


5,005



3,596



3,423Certificates of deposit


132,693



124,382



85,720$
152,745



140,136



98,376   (11)
    Borrowed
    Funds    June 30,2008


2007Weighted





WeightedAverage





AveragePrincipal


Rate


Principal


Rate(Dollars in thousands)Funds borrowed under repurchase agreements:FHLB

$
560,000



3.87
%

$
305,000



4.57
%Other brokers


440,000



4.79



400,000



4.94Total funds borrowed under repurchase agreements


1,000,000



4.27



705,000



4.78Other borrowed funds:FHLB advances


563,583



3.50



233,710



5.44Other brokers










100,000



5.38Total other borrowed funds


563,583



3.50



333,710



5.43Total borrowed funds

$
1,563,583



3.99


$
1,038,710



4.98  83




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
    June 30,2008


2007Weighted





WeightedAverage





AveragePrincipal


Rate


Principal


Rate(Dollars in thousands)Within one year

$
333,000



3.31
%

$
473,100



5.09
%One to two years


285,000



3.78



165,000



4.66Two to three years


440,000



4.68



100,000



5.08Three to four years


225,583



4.04



250,000



5.00Four to five years


230,000



3.93



50,610



4.77After five years


50,000



3.86







Total borrowed funds

$
1,563,583



3.99


$
1,038,710



4.98       June 30,2008


2007(In thousands)Amortized cost of collateral:Debt securities

$
40,120



95,120Mortgage-backed securities


1,023,408



802,177Total amortized cost of collateral

$
1,063,528



897,297Fair value of collateral:Debt securities

$
40,423



91,595Mortgage-backed securities


1,009,985



776,039Total fair value of collateral

$
1,050,408



867,634       12-month
 84




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
  (12)
    Income
    Taxes    Year Ended June 30,2008


2007


2006(In thousands)Current tax expense:Federal

$
10,020



5,166



15,963State


612



1,373



1,44510,632



6,539



17,408Deferred tax (benefit) expense:Federal


(1,335
)


6,565



(9,635
)State


(267
)


(20,581
)


(163
)(1,602
)


(14,016
)


(9,798
)Total income tax expense (benefit)

$
9,030



(7,477
)


7,610     Year Ended June 30,2008


2007


2006(In thousands)Expected federal income tax expense

$
8,770



5,177



8,033State tax, net


224



(12,486
)


834Bank owned life insurance


(1,391
)


(1,293
)


(957
)Change in valuation allowance for federal deferred tax assets


281



1,075



Dividend received deduction






(339
)


(447
)ESOP fair market value adjustment


211



229



103Non-deductible compensation


455







Other


480



160



44Total income tax expense (benefit)

$
9,030



(7,477
)


7,610  85




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
    June 30,2008


2007(In thousands)Deferred tax asset:Employee benefits

$
11,621



14,232Deferred compensation


1,506



641State net operating loss (NOL) carryforwards


9,882



9,885Intangible assets


830



1,360Allowance for loan losses


5,482



2,638Premises and equipment, differences in depreciation


131



Net unrealized loss on securities available-for-sale


2,323



2,582New Jersey alternative minimum assessment


2,402



2,724Capital losses on equity securities


2,053



1,732Contribution to charitable foundation


6,887



7,467ESOP expense


646



230Other


1,526



1,079Gross deferred tax asset


45,289



44,570Valuation allowance


(4,268
)


(3,947
)41,021



40,623Deferred tax liability:Discount accretion


319



366Premises and equipment, differences in depreciation






113Gross deferred tax liability


319



479Net deferred tax asset

$
40,702



40,144    86




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
            (13)
    Benefit
    Plans  Defined
    Benefit Pension Plan
    SERP,
    Directors Plan and Other Postretirement Benefits
    Plan
  and/or
 87




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
          SERP and Directors Plan


Other BenefitsJune 30,


June 30,2008


2007


2008


2007(In thousands)Change in benefit obligation:Benefit obligation at beginning of year

$
16,531


$
15,711


$
9,148


$
8,596Service cost


456



1,184



45



159Interest cost


958



898



243



539Amendment to plan






(877
)






Actuarial loss (gain)


1,065



365



(4,532
)


173Benefits paid


(3,148
)


(750
)


(4,194
)


(319
)Benefit obligation at end of year

$
15,862


$
16,531


$
710


$
9,148Funded status

$
(15,862
)

$
(16,531
)

$
(710
)

$
(9,148
)     SERP and Directors Plan


Other BenefitsJune 30,


June 30,2008


2007


2008


2007(In thousands)Prior service cost

$
683


$
113


$



$
Net obligation










209



1,607Net actuarial loss (gain)


2,697



2,918



(157
)


739Total amounts recognized in accumulated other comprehensive loss

$
3,380


$
3,031


$
52


$
2,346    88




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
    SERP and Directors Plan

Other Benefits2008

2007

2008

2007Discount rate


6.75
%


6.25
%


6.25
%


6.25
%Rate of compensation increase


3.64



5.05







     SERP and Directors Plan


Other BenefitsYears Ended June 30,


Years Ended June 30,2008


2007


2006


2008


2007


2006(In thousands)Service cost

$
456


$
1,184


$
1,381


$
45


$
159


$
196Interest cost


958



898



801



243



539



497Amortization of:Prior service cost


98



19



186











Transition obligation














75



200



201Net loss (gain)


114



150



325



(9
)






94Total net periodic benefit cost

$
1,626


$
2,251


$
2,693


$
354


$
898


$
988     SERP andDirectors Plan

Other BenefitsYears Ended June 30,

Years Ended June 30,2008

2007

2006

2008

2007

2006Discount rate


6.25
%


6.25
%


5.25
%


6.25
%


6.25
%


5.25
%Rate of compensation increase


5.05



6.82



7.21











     1% Increase

1% Decrease(In thousands)Effect on:Total service and interest cost

$
2


$
(2
)Postretirement benefit obligations


37



(34
)  89




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
    SERP andDirectors Plan


Other Benefits(In thousands)2009

$
1,488


$
1062010


1,469



1132011


1,414



952012


1,423



1022013


1,401



902014 through 2018


6,444



245   Summit
    Federal Benefit Plans
    401(k)
    Plan
    Employee
    Stock Ownership Plan
       90




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
  Equity
    Incentive Plan
        7-year
     91




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
    WeightedNumber of


AverageShares


Grant DateAwarded


Fair ValueNon-vested at June 30, 2007


1,666,959


$
15.25Granted


136,742



13.38Vested


(333,389
)


15.25Forfeited






Non-vested at June 30, 2008


1,470,312


$
15.08       WeightedWeighted


AverageNumber of


Average


Remaining


AggregateStock


Exercise


Contractual


IntrinsicOptions


Price


Life


ValueOutstanding at June 30, 2007


4,437,401


$
15.26Granted


351,851



13.39Exercised






Forfeited


(10,000
)


15.35Outstanding at June 30, 2008


4,779,252


$
15.12



8.4 years


$
Exercisable at June 30, 2008


888,280


$
15.26



8.4 years


$
     2008


2007Expected dividend yield


0.91
%


0.86
%Expected volatility


21.59
%


17.81
%Risk-free interest rate


3.04
%


4.58
%Expected option life


6.5 years



6.5 years     (14)
    Commitments
    and Contingencies   92




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
    Year Ending June 30,

Amount(In thousands)2009

$
3,9572010


4,0582011


4,1072012


4,1002013


3,780Thereafter


17,187$
37,189   (15)
    Fair
    Value of Financial Instruments  Disclosures about Fair Value of
    Financial Instruments,
  Cash
    and Cash Equivalents
    Securities
    FHLB
    Stock
  and/or
  Loans
        held-for-sale
 93




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
  Deposit
    Liabilities
    Borrowings
    Commitments
    to Extend Credit
      June 30,2008


2007Carrying





CarryingAmount


Fair Value


Amount


Fair Value(In thousands)Financial assets:Cash and cash equivalents

$
22,823


$
22,823


$
35,582


$
35,582Securities
    available-for-sale


203,032



203,032



257,939



257,939Securities
    held-to-maturity


1,255,054



1,198,053



1,578,922



1,531,876Stock in FHLB


60,935



60,935



34,069



34,069Loans


4,679,964



4,640,276



3,628,408



3,479,554Financial liabilities:Deposits


3,970,275



3,977,634



3,768,188



3,757,417Borrowed funds


1,563,583



1,580,064



1,038,710



1,031,764   Limitations
     94




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
    (16)
    Regulatory
    Capital          Minimum RequirementsTo be Well CapitalizedUnder PromptFor Capital


CorrectiveActual


Adequacy Purposes


Action ProvisionsAmount


Ratio


Amount


Ratio


Amount


Ratio(Dollars in thousands)As of June 30, 2008:Total capital (to risk-weighted assets)

$
741,028



21.8
%

$
272,329



8.0
%

$
340,411



10.0
%Tier I capital (to risk-weighted assets)


727,463



21.4



136,164



4.0



204,247



6.0Tier I capital (to average assets)


727,463



11.9



243,859



4.0



304,824



5.0    95




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
  (17)
    Parent
    Company Only Financial Statements    Balance
    Sheets
  June 30,2008


2007(In thousands)Assets:Cash and due from bank

$
58,397



120,843Securities
    available-for-sale,
    at estimated fair value


1,238



Investment in subsidiary


722,137



698,233ESOP loan receivable


39,159



39,558Other assets


8,407



9,345Total Assets

$
829,338



867,979Liabilities and Stockholders Equity:Total liabilities

$
800



9,120Total stockholders equity


828,538



858,859Total Liabilities and Stockholders Equity

$
829,338



867,979   Statements
    of Income
  Year Ended June 30,2008


2007


2006(In thousands)Income:Interest on ESOP loan receivable

$
3,055



3,082



2,087Interest on deposit with subsidiary






2,929



3,549Loss on securities transactions


(21
)






3,034



6,011



5,636Expenses:Contribution to charitable foundation










20,651Interest expense on stock subscriptions










711Other expenses


827



798



350827



798



21,712Income (loss) before income tax expense


2,207



5,213



(16,076
)Income tax expense


893



1,168



346Income (loss) before undistributed earnings of subsidiary


1,314



4,045



(16,422
)Equity in undistributed earnings of subsidiary


14,715



18,221



31,763Net income

$
16,029



22,266



15,341  96




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
  Statements
    of Cash Flows
  Year Ended June 30,2008


2007


2006(In thousands)Cash flows from operating activities:Net income

$
16,029



22,266



15,341Adjustments to reconcile net income to net cash (used in)
    provided by operating activities:Equity in undistributed earnings of subsidiary


(14,715
)


(18,221
)


(31,763
)Contribution of stock to charitable foundation










15,488Loss on securities transactions


21







Decrease (increase) in other assets


938



(7,494
)


(1,851
)(Decrease) increase in other liabilities


(8,320
)


8,753



367Net cash (used in) provided by operating activities


(6,047
)


5,304



(2,418
)Cash flows from investing activities:Capital contribution to subsidiary










(255,500
)Purchase of investments
    available-for-sale


(1,400
)






Loan to ESOP










(42,541
)Principal collected on ESOP loan


399



441



2,542Net cash (used in) provided by investing activities


(1,001
)


441



(295,499
)Cash flows from financing activities:Proceeds from stock offering, net










509,686Proceeds from sale of treasury stock to subsidiary


4,726







Purchase of treasury stock


(60,124
)


(96,706
)


Net cash (used in) provided by financing activities


(55,398
)


(96,706
)


509,686Net (decrease) increase in cash and due from bank


(62,446
)


(90,961
)


211,769Cash and due from bank at beginning of year


120,843



211,804



35Cash and due from bank at end of year

$
58,397



120,843



211,804  97




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
  (18)
    Selected
    Quarterly Financial Data (Unaudited)    Fiscal 2008 Quarter EndedSeptember 30


December 31


March 31


June 30(In thousands, except per share data)Interest and dividend income

$
76,120



79,071



78,160



79,456Interest expense


53,856



54,482



51,282



48,075Net interest income


22,264



24,589



26,878



31,381Provision for loan losses


199



1,750



997



3,700Net interest income after provision for loan losses


22,065



22,839



25,881



27,681Non-interest income


1,662



2,158



2,135



1,418Non-interest expenses


20,163



19,302



20,634



20,681Income before income tax expense


3,564



5,695



7,382



8,418Income tax expense


1,132



2,112



2,847



2,939Net income

$
2,432



3,583



4,535



5,479Basic and diluted earnings per common share

$
0.02



0.03



0.04



0.05   Fiscal 2007 Quarter EndedSeptember 30


December 31


March 31


June 30(In thousands, except per share data)Interest and dividend income

$
70,466



71,382



70,653



72,722Interest expense


47,037



49,452



48,127



50,647Net interest income


23,429



21,930



22,526



22,075Provision for loan losses


226



101



199



203Net interest income after provision for loan losses


23,203



21,829



22,327



21,872Non-interest income


1,649



(2,074
)


1,723



1,877Non-interest expenses


18,116



19,256



20,131



20,114Income before income tax expense (benefit)


6,736



499



3,919



3,635Income tax expense (benefit)


2,355



(11,536
)


992



712Net income

$
4,381



12,035



2,927



2,923Basic and diluted earnings per common share

$
0.04



0.11



0.03



0.03  98




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
   (19)
    Earnings
    Per Share    For the Years Ended June 30,2008


2007Per








PerShare








ShareIncome


Shares


Amount


Income


Shares


Amount(In thousands, except per share data)Net income

$
16,029










$
22,266Basic earnings per share:Income available to common stockholders

$
16,029



105,447,910


$
0.15


$
22,266



111,730,234


$
0.20Effect of dilutive common stock equivalents(1)






153,854











281,830Diluted earnings per share:Income available to common stockholders

$
16,029



105,601,764


$
0.15


$
22,266



112,012,064


$
0.20     (1)
    
    During the years ended June 30, 2008 and 2007, options to
    purchase shares of unvested restricted stock of 68,971 and
    18,378, respectively, were outstanding, however were not
    included in the computation of diluted EPS because their
    inclusion would be anti-dilutive.    (20)
    Recent
    Accounting Pronouncements      157-1, (FSP 157-1) FSP 157-2,
 99




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
    Notes to Consolidated Financial
    Statements  (Continued)
  (FSP 157-2). FSP 157-1 FSP 157-2
          EITF 06-11 EITF 06-11 EITF 06-11
  EITF 03-6-1 EITF 03-6-1
 100




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##### Table of Contents



Financial Statement Schedules
    Exhibits
  3
.1

Certificate of Incorporation of Investors Bancorp, Inc.*3
.2

Bylaws of Investors Bancorp, Inc.*4


Form of Common Stock Certificate of Investors Bancorp, Inc.*10
.1

Form of Employment Agreement*10
.2

Form of Change in Control Agreement*10
.3

Investors Savings Bank Director Retirement Plan*10
.4

Investors Savings Bank Supplemental ESOP and Retirement Plan*10
.5

Investors Savings Bank Executive Supplemental Retirement Wage
    Replacement Plan*10
.6

Investors Savings Bank Deferred Directors Fee Plan*10
.7

Investors Bancorp, Inc. Deferred Directors Fee Plan*14


Code of Ethics**21


Subsidiaries of Registrant*23
.1

Consent of Independent Registered Public Accounting Firm31
.1

Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200231
.2

Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200232


Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002     *
    
    Incorporated by reference to the Registration Statement on
    Form S-1
    of Investors Bancorp, Inc.
    (file no. 333-125703),
    originally filed with the Securities and Exchange Commission on
    June 10, 2005.**
    
    Available on our website www.isbnj.com 101




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##### Table of Contents



SIGNATURES    INVESTORS BANCORP, INC.
  By:
    /s/  Kevin
    Cummings           Signatures

Title

Date/s/  Kevin
    CummingsKevin
    Cummings

Chief Executive Officer and President (Principal Executive
    Officer)

August 22, 2008/s/  Thomas
    F. Splaine, Jr.Thomas
    F. Splaine, Jr.

Senior Vice President and
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

August 22, 2008/s/  Doreen
    R. ByrnesDoreen
    R. Byrnes

Director

August 22, 2008/s/  Robert
    M. CashillRobert
    M. Cashill

Director

August 22, 2008/s/  Brian
    D. DittenhaferBrian
    D. Dittenhafer

Director

August 22, 2008/s/  Patrick
    J. GrantPatrick
    J. Grant

Director, Chairman

August 22, 2008/s/  John
    A. KirkpatrickJohn
    A. Kirkpatrick

Director

August 22, 2008/s/  Vincent
    D. Manahan, IIIVincent
    D. Manahan, III

Director

August 22, 2008/s/  Richard
    PetroskiRichard
    Petroski

Director

August 22, 2008 102




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##### Table of Contents



Signatures

Title

Date/s/  Joseph
    H. Shepard IIIJoseph
    H. Shepard III

Director

August 22, 2008/s/  Rose
    SiglerRose
    Sigler

Director

August 22, 2008/s/  Stephen
    J. SzabatinStephen
    J. Szabatin

Director

August 22, 2008  103